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Financial institution

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Definitions

Computer Fraud and Abuse Act

Under the U.S. Computer Fraud and Abuse Act (18 U.S.C. 1030), a financial institution is defined as:

(A) an institution with deposits insured by the Federal Deposit Insurance Corporation;

(B) the Federal Reserve or a member of the Federal Reserve including any Federal Reserve Bank;

(C) a credit union with accounts insured by the National Credit Union Administration;

(D) a member of the Federal home loan bank system and any home loan bank;

(E) any institution of the Farm Credit System under the Farm Credit Act of 1971;

(F) a broker-dealer registered with the Securities and Exchange Commission pursuant to section 15 of the Securities Exchange Act of 1934;

(G) the Securities Investor Protection Corporation;

(H) a branch or agency of a foreign bank (as such terms are defined in paragraphs (1) and (3) of section 1(b) of the International Banking Act of 1978); and

(I) an organization operating under section 25 or section 25(a) of the Federal Reserve Act.[1]

General

A financial institution is an institution that uses their funds chiefly to purchase financial assets, such as loans or securities (as opposed to tangible assets such as real estate). Financial institutions can be separated into two major groups according to the nature of the principal claims they issue:

(1) depository institutions, such as commercial banks, savings and loan associations, savings banks and credit unions, which obtain funds largely by accepting deposits from the public and
(2) non-depositories, such as life insurance and property-casualty insurance companies and pension funds, whose claims are the policies they sell or their promise to provide income after retirement.

Red Flags Rule

Under the Red Flags Rule, a financial institution is defined as

a State or National bank, a State or Federal savings and loan association, a mutual savings bank, a State or Federal credit union, or any other person that, directly or indirectly, holds a transaction account (as defined in section 461(b) of title 12) belonging to a consumer.”[2]

References

  1. 18 U.S.C. 1030(e)(4).
  2. 15 U.S.C. §1681a(t).

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